Gold may benefit if Fed tightening is delayed

The market is anticipating the beginning of some federal funds rate normalization in 2015.

Last week, FOMC end of-the-year rate expectations declined 10bps to 51bps based on the Dec. 2015 Fed Funds Futures. The latest FOMC minutes did little to influence fed funds rate change expectations but declining bond yields on the back of some wage deflation may have.

According to ETF Securities, If the FOMC does not hike in 2015, it could be due to a lack of inflation expectations and/or increasing stock market volatility.

Should the Fed maintain its near zero rate policy for longer, precious metal prices would likely be supported as an early 2015 rate hike was highly expected.